Libor link in Guardian Care Homes legal case against Barclays could open floodgates for claims

The two scandals of interest rate swap mis-selling and Libor-rigging have been brought together in what may prove a landmark legal case brought by Graiseley Properties, owner of Guardian Care Homes, against Barclays. The trial has been set for October.

The £38million claim was brought by Guardian, which said it was mis-sold interest rate swaps in 2007 and 2008 by Barclays that later caused it to lose millions of pounds when interest rates fell sharply.

In June last year Barclays was fined £290 million after regulators found some of its traders had attempted to rig Libor – key to how much banks charge to lend to each other.

Legal case: Guardian argues that because some of Barclays' traders were trying to rig Libor, the swaps contracts it was sold were unfair

Libor rates, of which there are many
based on different currencies and different loan lengths, are used as
benchmarks to price trillions of pounds worth of contracts worldwide,
including interest rate swaps.

Guardian argues that because some of Barclays’ traders were trying to rig Libor, the swaps contracts it was sold were unfair.

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Should Graiseley succeed, it could
prompt similar claims from thousands of companies and individuals who
have bought banking products linked to Libor from banks.
The scale of compensation could be massive.